Congestion Problems In Rouen
The port of Rouen handled 6.35 MMT of grain in 2008, according to it's website (here), but congestion is causing problems in France's leading grain port I hear.
The recent decision by the world's leading wheat importer, Egypt, to only accept vessels of 60,000 MT panamax size is a major problem for Rouen as it can't accommodate vessels that large.
Things have got so bad that the leading grain storage facility at the port, the Senalia silo, is full and has stopped taking further deliveries of grain.
That potentially leaves the grain trade with a major headache, as Senalia is the sole delivery point for Euronext milling wheat futures.
What happens if you want to make delivery but they haven't got the room? That certainly might cause some erratic behavior with the January future over the next few weeks until the situation is resolved.
CBOT Closing Comments
Soybeans
January soybean futures closed at USD10.12, down 10 cents; January soymeal futures at USD305.40, down USD2.00; January soy oil futures are at 38.33, down 31 points. Informa increased their estimate for the 2009 US soybean crop to 3.42 billion bushels, up from 3.333 billion last month and 102 million above the USDA's November figure. The did however cut their 2010 planting estimate to 77 million, down 500,000 from the area sown in 2009.
Corn
March corn futures closed at USD3.97 ¾, up ¾ cent; May corn futures at USD4.08 ½, up ¾ cent. Informa reduced their estimate for the 2009 US corn crop from 13.64 billion bushels to 12.97 billion. They increased their estimate for 2010 US seedings to 89.5 million acres, 3.1 million more than the area sown in 2009, and the second largest area on record. China have reduced the import levy on ethanol from 30% to 5%, under pressure to green up it's act, that might lead to increased demand from the world's largest polluter.
Wheat
March CBOT wheat futures closed at USD5.28, up 9 ½ cents; March KCBT wheat futures at USD5.24 ¼, up 9 ¼ cents; March MGEX wheat futures at USD5.35 ¼, up 6 cents. Informa said that US farmers will reduce winter wheat area by almost 4 million acres - from 43.31 million to 39.45 million - the lowest for a decade. This is likely due to disenchantment with the low price and slack demand for wheat, and also the lateness of the US corn and soybean harvest in some states this year.
EU Wheat Closing Comments
EU wheat futures closed with very little change Friday with Paris January milling wheat up EUR0.25 at EUR128.25/tonne, and London January feed wheat up GBP0.20 at GBP104.20/tonne.
The trade appears to be slipping quietly into festive mode, and it seems unlikely that there will be much in the way of action now until 2010.
Heavy snow fell across large areas of western Europe Thursday/Friday, with widespread coverage down the eastern side of the UK. That will help protect winter wheat from frost as temperatures dip below freezing.
Snow also fell in eastern Europe and Ukraine, easing winterkill concerns in some areas.
Export business is slow with the UK only managing to ship 582,000 MT of wheat and 323,000 MT of barley in the first four months of the marketing year. The EU has only granted export licences for 7.8 MMT of soft wheat 24 weeks into the MY, 28% down on the 10.8 MMT granted at the same time last year.
Strategie Grains say that the EU-27 will produce 3.6 MMT more soft wheat in 2010 than we did this year, and 1.9 MMT of that will come from the UK. EU-27 barley output is seen down 3 MMT, and corn production up 1.7 MMT. Durum wheat output is also seen higher, up 500,000 MT.
eCBOT Close, Early Call
The overnight grains closed a little firmer, but well off session highs, with beans around 4 cents higher and wheat & corn 2-3 cents higher.
A weaker dollar led to what turned out to be only a very modest correction from last night's steep losses.
Crude oil is up close to USD75/barrel after news emerged that Iranian forces had surrounded an Iraqi oil well.
China has bought 116,000 MT of US soybeans for the 2010/11 marketing year, the USDA have reported today.
China, under pressure from the green lobby, has lowered the import tariff on ethanol from 30% to 5%, which may stimulate some demand for the fuel from the Far East.
The IGC forecasts global wheat production for 2010/11 down by 23 MMT to 645 MMT, but there might be some more pain to get through first.
India's winter wheat plantings are at 23.1 million hectares, fractionally higher than a year ago, but still leaving around 5 million ha to sow to meet government targets.
More heavy rain is in the forecasts for southern Brazil and northern/eastern parts of Argentina. In Brazil certainly they will be wishing it might stop sometime soon. Asian rust will be hoping it doesn't.
Gold is down to a one month low on profit-taking and year-end book-squaring. The dollar is down, but off intra-day lows set earlier this morning.
Early calls for this afternoon's CBOT session: corn called 1 to 3 higher; soybeans called 3 to 5 higher; wheat called 1 to 2 higher.
New Malting Barley Variety In Town
Syngenta's newest malting barley arrival to make the HGCA's Recommended List is Propino, which they say is the highest yielding spring malting barley variety in the UK.
Propino joins it's big brothers, the evocatively named Tipple and Quench, in the seed catalogues this spring.
Do they pay money to people to come up with these names or do they just go down the pub and pick one from a hat?
What about a variety called Ginger-haired Stepson (nobody wants it) or Big Issue (hardly anyone buys it)?
It's easy this, I can think of loads. Herpes, Boomerang, Millstone, Titus Bramble, Betamax. How many more do you want, and when do I start Syngenta?
I had a dog once called Minton, just so that every time it was naughty I could say "Bad Minton". And I can't even begin to tell you the story behind what our other dog was called...
Ukraine Winter Seeded Area Up On Year Ago
The Ukraine State Statistics Committee say that farmers have planted 3.7% more winter grains for the 2010 harvest than a year ago.
They must think that they know something we don't, as they must be one of the few nations on the planet to think they've spotted an opportunity in the barley market.
Ukrainian farmers have decided to inexplicably increase barley plantings, up from 15.3% of seeded area last season to 18.6% this time round. Good luck with that one Ukraine, but I think that you might be better off sticking to the Eurovision Song Contest.
Wheat's share of the sown area is down slightly from 78.8% to 77.9%.
Indian Finance Minister 'Mad As A Box of Frogs' - Analyst
Market analyst claims that the Indian Finance Minister, Pranab Mukherjee, is as mad as a box of frogs have been angrily denied.
When questioned by reporters if there was any truth in the reports, Mukherjee said "no". Angrily.
So there we have it, a split decision on the sanity of Pranab Mukherjee. He thinks he's OK.
More as we get it....
Next week on Nogger's Blog we investigate rumours that India's junior agriculture and food minister K.V. Thomas can't fight his way out of a paper bag.
Indian Food Inflation At Decade High
Indian food price inflation has soared to a decade high of 19.95 percent in the week to December 5. A Parliamentary panel investigation blames to Government, citing the "inability to import on the part of the public sector agencies is also suggestive of the abject failure of the Government's market intervention policies to meet demand-supply gaps in essential commodities".
The finance ministry are singled out for their "failure to make timely interventions and squarely address the burning issue (inflation) with due seriousness".
The Finance Minister, Pranab Mukherjee, tried to reassure reporters that he was on the case and that he did, in reality, have a clue what he was doing.
"The government has taken a number of important measures to improve the domestic availability of essential commodities and to moderate their prices to help the common man from the pressure of inflation," he said.
I for one, and I suspect many others too, remain unconvinced. The government are said to be still "considering" whether to lower the minimum tender price for state-owned wheat from around USD300/tonne.
Figures on farmers' progress with winter wheat plantings are expected later today.
